Best Banks and Credit Unions in California

How to Know Which Bank or Credit Union Is Best for You

Our article listed California’s credit unions and banks that offer the best products and services. However, choosing one that fits your needs means that you need to consider multiple factors to make the right decision.

Although banks and credit unions are similar when it comes to the services they offer, there are still significant differences in terms of products, rates, and availability when it comes to these two types of financial institutions.

While banks are for-profit institutions, credit unions work for their members. As such, credit unions are not-for-profit institutions, allowing their members more freedom in decision-making. Of course, both types of organizations are equally safe. Trustworthy banks are FDIC members, while credit unions offer products insured by the NCUA (National Credit Union Administration).

To find out which bank or credit union in California is the best for you, first, you’ll need to know the advantages and disadvantages of both.

Credit Union Advantages

The primary purpose of a credit union is to enable better financial products for the people connected by their living area, working organization, faith, or some other factor. Unlike banks, credit unions members are all equally involved in making decisions regarding a credit union.

While banks work for profit, credit unions don’t. Instead, they strive to provide their members with the most favorable terms for the products they offer.

High rates and low fees are the main reasons to choose a credit union over a bank. The largest unions in California offer affordable checking and savings accounts, with low or no monthly fees.

In addition, the interest rate you’ll accrue on your deposits is higher than at traditional banks. Depending on the credit union you choose, you can earn interest on your account with monthly balances under $1.

Credit unions give affordable rates on personal and car loans. Unlike banks and online lenders, credit unions also try to offer flexible repayment terms to their members.

As mentioned, credit unions are practically owned by their members, meaning that they vote and participate in creating and changing credit union policies. For this reason, credit unions also provide better customer service than most banks.

Credit Union Disadvantages

Although they offer better rates on loans and bank accounts, these financial institutions are not without flaws. One of their biggest imperfections is the limited number of products that most credit unions offer.

However, the best credit union in California will undoubtedly offer products that an average consumer might be looking for, including checking accounts and savings products, personal loans, and credit cards.

Another thing that might be a problem for some customers is the lack of the California state credit union branches. Unlike banks, which usually have physical stores in every state, some credit unions don’t have branches at all.

In some cases, credit unions might charge membership fees. Also, to become a member of a credit union, you must meet its specific requirements.

Bank Advantages

While credit unions limit their customer base to a specific community, banks are open to any individual or company. To open a bank account, all you need to be at least 18 years old and a US citizen.

All the top banks in California offer a long list of financial products, including checking and savings accounts, credit cards, personal and business loans, IRAs, and more. Unlike credit unions, large banks have a vast network of ATMs and more physical stores.

The main advantage of using banks and their services is that they invest more money in online and mobile banking than credit unions. While you can still benefit from the California credit union online banking, banks offer more advanced and faster services.

Almost all banks offer a mobile app for iOS and Android phones, so you can manage your account, pay bills, and make purchases on the go.

Bank Disadvantages

If you open an account at a bank, you will be a client, not a member. As a client, you don’t have any right to decide how the bank is managed. Sometimes, you can also get poor customer service, especially if you compare it to a credit union customer-oriented service.

More importantly, banks are for-profit institutions, meaning that they need to earn off of you. In practice, this means poorer interest rates, higher fees, and less flexible terms.

Although all banks in California offer a plethora of products, banking services are more expensive than those offered by credit unions. If you want to apply for a personal loan, you should expect high monthly rates.

On the other hand, bank checking and savings accounts come with low yields and monthly maintenance fees. If you want to open a cost-effective bank account, better check at local banks or California credit union branches.